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Your health plan's weird rules

Sharon Anne Waldrop - Last updated: Dec. 4, 2012

You might not be too happy to find out what rules a group health plan can impose.

We enlisted two industry experts to help us answer some of the most common questions from Insure.com readers regarding health plans at work: Arlene Lieberman is a principal in the employee benefits practice at Barney & Barney in San Diego, and Teagan Storck is a benefits administrator at Argus Benefits in Atlanta.

Can I get out of my employer's health plan if I already enrolled for the next year?

Enrolling for the next year locks you in unless you have an "event" that qualifies you to get out.

"You would be allowed to cancel coverage if you experience a change in status or qualifying event," Storck says. A change in status would be switching from permanent employment to temporary, full-time to part-time, or any other instance that makes you ineligible for coverage. A qualifying life event includes marriage, divorce, birth or adoption of a child, change in your spouse's employment or other event. Here's more from the Department of Labor.

Notify your human resources department within 30 days of the event and be prepared to provide proper documentation such as a marriage license (followed by the certificate when it arrives), a copy of a new health insurance card showing the effective date or a screenshot of the enrollment.

Can an employer require a worker to be on the company health plan? If not, under what circumstances?

"If the employer pays 100 percent of the employee-only premium, then all benefit-eligible employees could be required to participate in the plan," Lieberman says. You would be required to enroll only if this is documented in the insurance contract.

However, if the employer requires an employee to make a premium contribution, it cannot mandate that all eligible employees participate in the plan.

Can an employer require me to tell them about a spouse's health insurance coverage?

Yes, employers can require you to reveal your spouse's insurance situation. According to Storck, most employers will take the employee's word without requiring proof, such as documentation from the spouse's employer, an insurance card, or certificate of credible coverage. They may also ask for proof that a spouse does not have access to coverage. This is often in the form of a letter from the spouse's human resources department.

Can my employer impose a surcharge if my spouse is on the company health plan but is eligible for a health plan at his/her own workplace?

Yes.

Most of Storck's clients have added a spousal surcharge if the spouse has an option for coverage elsewhere but is on the employee's plan. These surcharges generally range from $25 to $50 per month and are charged whether or not the spouse participates in his or her own employer's health plan.

Can my employer remove my spouse off the company health plan if they become eligible for another group health plan?

Yes, says Lieberman.

"A spouse's eligibility on another health plan is considered a qualified event, which allows the spouse to be removed from the employee's plan," she says. Notification of the event must be provided to the employer within 30 days. The employee will not need to wait until the next open enrollment to make the change.

Does an ex-spouse have to stay on an employee's health plan until the next open enrollment period if the employee doesn't promptly notify the company of a divorce?

No.

"In most cases, an ex-spouse is terminated from the plan and notified of their COBRA continuation rights at the time that the employee notifies their employer of the divorce," Lieberman says.

Can an employer kick someone off the company health plan when they're eligible for Medicare?

No. An employer cannot drop an employee or a spouse from the company's health plan if they become eligible for Medicare.

Leiberman explains the criteria that determine the primary payer for claims:

If the group is more than 20 employees, then the group coverage is primary and Medicare is secondary.

If the group is fewer than 100 employees and the spouse is disabled, Medicare will be primary and the group plan is secondary.

For groups of more than 100 employees, the group plan is primary unless the disabled insured has been receiving dialysis for 39 months, in which case Medicare will be primary.